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TERRACE BAY/SCHREIBER NEWS Page 9 Wednesday, November 22, 1989 Ses ss SSS cess Business affect tax This column is being run with the cooperation of the Superior North Business Development Centre. The first column ran a few weeks ago after which we encountered some difficulties. But, we're back on track now and the column will be running weekly. Whether you're a large interna- tional corporation or just a tiny sole proprietorship, one aspect that can have a considerable effect on how your business is organized is taxes. And it all starts with how you set up your business. One thing, though, that cannot be stressed enough is that tax reg- ulations are being constantly revised. So, before you make any business decisions that may affect your tax position, you should consult with professional advisors to ensure that you are on the right track. Regardless of whether you are just considering getting into busi- ness, or are already established, the question that must be accu- rately determined is "would my business give me a better return if it were organized differently?" In other words, if you're a sole proprietorship, might you be bet- ter served by forming a corpora- tion, or vice versa. Of course, it all depends on the particular nature of your busi- ness. ; Set-up can Situation For those just considering starting a business, the sole pro- prietorship is often the most appropriate approach as it's the most basic and simplest form of operation. In the proprietorship, the income from your business is included in the proprietor's tax return and is taxed at individual rates. The second form of business is the partnership. Here, there is more than one proprietor and an agreement is drawn up to govern the activities of the business and each partner's share of the rewards and responsibilities of running it. As far as income tax is con- cemed, the partnership is a sepa- rate entity. Accordingly, the income is divided up based upon the partnership agreement and taxed individually. Many professionals, such as doctors and lawyers are not allowed under the law to form corporations relating to their practices and rely on professional partnerships as a means to share common costs. The third method of business organization, and by far the most complicated, is the corporation. It is a separate legal entity and © the income it earns is taxed sepa- rately from that of the sharchold- ers. When it comes to a single pro- Former Terrace Bay residents, now livin of Lucille and Harold Kodila for Dorothy OT g in Kelowna, British Columbia, held a barbecue at the home Koski who was getting ready to leave for a month long holiday in Africa. From left to right are Mary and George Dashkeywitch, Dene Clancy, Peggy Schretlen, Jim Clancy, Dorothy Koski and Lucille and Harold Kodila. prietorship, there are six basic advantages to consider. These include low start-up costs, greatest freedom from reg- ulation, the owner holds direct control, minimal working capital requirements, tax advantages to small owner, and all profits . accrue to the owner. However, there are some dis- - advantages inherent in single pro- prietorships. These include unlimited liabil- ity, lack of continuity, the diffi- culties of raising capital, and, if your business is reasonably suc- cessful, you can probably expect to pay higher income taxes. Also, sole proprietors are often disadvantaged as to the forms of employee compensation plans which are available and their cost. In the next column, we'll look at the advantages and disadvan- tages of partnerships and corpora- tions. For more information about the Superior North Business Development Centre and the ser- vices it provides, contact Bob Maclver at the SNBDC office at Simcoe Plaza, Terrace Bay, POT 2W0 or telephone 825-9688. oo ee Book now for Christmas 100% BCF Nylon 3 M Stain Release Reg. $45.95 sq. yd. ANG '| 1/8 Gauge Fractured Saxony 5 year wear. guarantee ow On $2995 sq. yd. be 'Authorized' 'VENTURE' Tuxedo 100% BCF Nylon Soft Lustre Saxony 3 M Stain Release 5 year wear guarantee Reg. $34.95 sq. yd. Now Only $2395 'sq. yd. Carpet Dealer -- Reg. $24.95 Photo by John Schretlen When help is needed. The Red Cross. With your help, Red Cross provides a blanket of services and Programmes in your community. Please support your local Red Cross branch. Tn Canadian Red Cross Society 7 100% Continuous Filament Nylon Cut Loop styling With Staintamer protection 5 year wear guarantee ow onl) $1 g35 Caliiope 100% BCF Nylon Cut & Loop styling With built-in Staintamer Protection 5 year wear guarantee how Oniy : S$] 595 Reg. $19.95 and only at Watson's! sq. yd. Peninsula Rd. 229-1601 Two Full Time installers With over 20 years of experience. Mark White and Tom Lanos are available to install any of your flooring needs: Carpet, Vinyl Flocring, Ceramics, Quarry, Marble 4 = = "ft Ee a - - 20% OFF All in stock vinyl °